Costs of mortgage redemption

wafers

We are about to exchange on our house sale. Our solicitors gave us an original cost of redemption on 25.5.11 and on the 31.5.11 updated it as we were approaching exchange. The cost had crept up in the meantime. My payment to the solicitors, including redemption cost cleared yesterday.

Today the estate agent informs me that our solicitor is planning for our completion next Thursday, despite the fact that we had put it in writing in various documents and e mails that we wished to complete next Friday.

Quick call to the solicitors ensues and I am told in order to complete a day later, the redemption cost will go up, so I will need to pay £120 (or thereabouts) to reflect this. I was concerned about the whole idea, and also having to pay more 'chaps' transfer costs, so a cheque is deemed ok in this case to 'save me further costs'.

Am I being stitched, or is this the norm?!

madmish00

Unless you have a ridiculously high mortgage or an even more ridiculous interest rate the figure of £120 seems extreme.

I have a redemption statement (albeit the sale has fallen through)which gave a redemption figure stating "total amount to redeem on 18th April - 'x' "

It then goes on to say "a daily interest charge of £4.80 must be added to the redemption figure for each day after the specified date"

This seems fair enough as interest is accrued daily on the account so each day that goes by will increase the outstanding balance subject to any further payments that are made against the account.

But I have no idea where they come up with a figure like £120!

opinions4u

Daily interest perhaps? Or, more dangerously, monthly interest - if a lender calculates interest monthly (rare though) that could account for it.

Next Thursday is 9th June. So is £120 from 31st May to 9th June?

How much do you owe? What rate are you paying? £100,000 at 3.65% would accrue interest at £10 a day. £200,000 at 7.30% would cost £40 a day.

As for CHAPS costs, discuss this with the solicitor. Most would accept a cheque for a modest amount like this.

wafers

Does this look reasonable? Opinions4u logic seems to make sense - the difference between exchange and completion dates would figure. Just can't work out why it wasn't built into the original calculations though.

Thrugelmir

wafers wrote: »

Just can't work out why it wasn't built into the original calculations though.

Until completion is agreed. Then the settlement figure is a moving target.

Interest accrues on a mortgage daily and is charged monthly in arrears.

wafers

Thrugelmir wrote: »

Until completion is agreed. Then the settlement figure is a moving target.

Interest accrues on a mortgage daily and is charged monthly in arrears.

Thrugelmir, you're a star! Thanks for explaining that. Just wish my solicitor had been able to word it that simply so it would have made sense. Thanks!